Sprouts Farmers Market’s stock market performance
After bleeding for two years in the stock market, Sprouts Farmers Market (SFM) finally bounced back in 2017. The value-oriented organic food retailer’s stock price has jumped 27% YTD (year-to-date) after tumbling 52% between 2014 and 2016.
The company has done better than Kroger (KR) and SuperValu (SVU), which lost 35% and 30% of their value, respectively, year-to-date. Whole Foods Market (WFM) has gained 36% this year. Most of this gain followed the Amazon deal, which was announced on June 16.
SFM has outperformed the seven-company S&P 500 Food and Staples Retail Index and the S&P 500 Index (SPX), which have YTD returns of -1.2% and 9.8%, respectively. The SPDR S&P Retail ETF (XRT), which invests 1% of its portfolio in SFM, has fallen ~9% YTD.
The Amazon–Whole Foods deal
On June 16, 2017, Amazon announced its intention to acquire Whole Foods Market for $13.4 billion. Although the deal bolstered Whole Foods Market’s stock price by 29%, KR, SFM, and SVU fell 9.2%, 6.3%, and 14.4%, respectively, after the announcement.
Kroger tumbled 22% in June, which was also driven by the grocery giant’s guidance revision to the $2.00–$2.05 range compared to its earlier guidance of $2.21–$2.25.
What can you expect from SFM stock?
Sprouts Farmers Market (SFM) traded at $24.13 on July 19, 2017, which was ~7.7% below its 52-week high price. Wall Street analysts assigned an average price target of $25.24, which indicates an upside of ~5% over the next one-year period. Individual target prices for the company range between $22.00 and $30.00.
Kroger and SuperValu have better upsides of 17% and 62%, respectively. However, Whole Foods Market’s stock price is predicted to fall 7% over the next year.
Read the next section to see what Wall Street recommends for SFM and its peers.